Audiovisual equipment prices

Since the 1990s, the price of audio-visual equipment, such as computers, music players and televisions has plummeted, falling almost every year since the index began. The retail price index is measured as a basket of goods, which has developed over time with consumer preferences and, in the case of audio-visual equipment, the available technology. The basket of goods includes flat panel televisions, DAB radios, DVD and Blu-ray players, PCs and peripheral equipment, tablet computers, satellite navigation systems and digital TV receivers and recorders. In 2015, headphones were added to the basket.

The long-term downward trend partly reflects the consistent and sizeable quality improvements in the types of equipment available in the retail market as much as declining in the retail price per unit. However, it is clear that the price of many audio-visual products has fallen over the long-term, such as digital cameras and PCs. The reduction in price has been aided by large volumes of cheap imports, both of finished products and electronic components. Globally, many large electronics companies have either shifted their own manufacturing capacity to low-cost countries in East Asia and Eastern Europe, or have outsourced production to manufacturers located in low-cost countries. The import price of electronic goods has fallen considerably over the past 20 years, which has been helped by the strong value of the pound, especially against currencies in importing countries.

Greater competition among manufacturers and in the UK retail sector has encouraged lower prices. Similarly, the sharp depreciation in the value of the pound over 2016-17 inflated the price of imports and dampen the decrease of the index. However, the full extent of this was felt over the following year, with average prices rising for the first time since the index was compiled. Although prices are expected to fall in the long run as competition intensifies. Over the five years through 2022-23, the price of audio-visual equipment is expected to fall at a compound annual rate of 0.7% to 6.9 points. Supply side issues in 2020-21 due to the coronavirus pandemic caused audiovisual prices to grow for the first time since 2017-18. Prices continued to grow with a marginal increase in 2021-22 and are forecast to grow 1.1% in the current year as a result of major international inflationary pressures following the reopening of economies from the coronavirus pandemic.